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South Africa NRIs · Rental Income Tax

Rental income tax for NRIs in South Africa

Renting out Indian property from South Africa means your tenant must deduct tax on the gross rent. Set it up right and reclaim the heavy over-deduction.

When you rent out Indian property while living in South Africa, the rent is taxed in India. Under the India-South Africa treaty, income from immovable property is taxable where the property sits, so the rate doesn't drop for living abroad. Because you're a non-resident landlord, your tenant is legally required to deduct tax at source on the rent under Section 393(2) (Section 195 until 31 March 2026), at the 31.2% non-resident rate on the gross rent, not under the lighter resident-landlord rule. That deduction is heavier than your actual tax, because you get a 30% standard deduction when you file, so most of the gap comes back as a refund.
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India-South Africa key facts: rental income tax

Default non-resident TDS rate31.2%
What the treaty changes hereIt sets no lower rate on this income. What a treaty decides here is which country gets to tax it.
Treaty article / basisSource country
Your TRC issuing authoritySARS (South African Revenue Service)

Rates reflect India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026) and the India-South Africa treaty. Surcharge applies on top; the 4% cess is already included in this figure.

How it works on the India side

A tenant paying rent to an NRI landlord must deduct TDS under Section 393(2) (Section 195 until 31 March 2026), the provision for any payment to a non-resident, which means the tenant has to take a TAN, deduct each month on the gross rent, deposit it, file a quarterly Form 144 (the old Form 27Q) against your PAN, and issue you a TDS certificate. The common, costly mistake is the tenant using Section 194-IB, the 2% resident-landlord rule, which doesn't apply to a non-resident landlord and leaves both sides exposed.

The deduction on gross rent is more than you actually owe, because your taxable rental income is much smaller: a flat 30% standard deduction comes off under Section 24(a), and home-loan interest comes off too. When you file your return, the TDS the tenant deposited is set against your real liability and the excess is refunded, but only if the tenant's quarterly statement correctly reports it against your PAN, which is why setting the tenant up right from the start matters. If you'd rather not wait a year for that refund, a lower-deduction certificate on Form 128 under Section 395 (the old Form 13 under Section 197) can cut the monthly deduction at source instead.

What changes because you live in South Africa

South Africa taxes residents on worldwide income, so this Indian income also lands on your ITR12, with a section 6quat credit for the Indian tax paid. Here's the part that costs Durban families money: SARS credits only foreign tax that is payable with no right of recovery, so any Indian tax withheld above your real Indian liability earns you nothing here. India will refund that excess, but only if you file the Indian return, so skipping it turns a recoverable overpayment into a permanent loss. On the gains side, from 1 March 2025 (the 2026 year of assessment) you can credit the Indian tax on a foreign capital gain up to the South African tax on that gain, where before only 40% of it counted because only 40% of a gain enters your taxable income. Watch the calendar too, because your SARS year ends in February, so one Indian financial year straddles two ITR12s.

Frequently asked questions

Common questions from South African Indians

Under Section 393(2), the successor to Section 195, because you're a non-resident landlord. The tenant has to take a TAN, deduct on the gross rent at the 31.2% non-resident rate, deposit it, file a quarterly Form 144 (the old Form 27Q) against your PAN and give you the TDS certificate. Section 194-IB, the 2% rule most tenants know (it was 5% until 1 October 2024), applies only to resident landlords and is the wrong provision for a non-resident.

Yes. The deduction is on the gross rent, but your taxable rental income is much smaller, because you get a flat 30% standard deduction under Section 24(a) plus any home-loan interest before tax is computed. The over-deducted amount comes back as a refund when you file your Indian return, provided the tenant's quarterly statement correctly reports the TDS against your PAN. South African Indians who don't want to wait for that refund apply for a Form 128 certificate instead.

No. Income from immovable property is taxable where the property sits, so Indian rent stays taxable in India regardless of where you live. South Africa may tax the same rent, with a credit for the Indian tax paid, though whether it does turns on remittance and residence-year rules the note below sets out. The treaty stops double taxation. The saving comes from the 30% standard deduction and reclaiming the over-deducted TDS, not from a lower treaty rate.

Go further

Read the full guide, or see your country's complete picture

NRI landlord: setting your tenant up for Section 195 TDSSouth Africa NRI tax guide: every income type and the rates that apply

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